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Cash Flow Statement

Jammu & Kashmir Board · Class 12 · Accountancy

Quick revision notes for Cash Flow Statement — Jammu & Kashmir Board Class 12 Accountancy. Key concepts, formulas, and definitions for last-minute revision.

116 questions76 flashcards5 concepts

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An infographic illustrating the core concept of a Cash Flow Statement, showing its purpose (inflows/outflows of cash and cash equivalents), its three main categories (Operating, Investing, Financing A
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Key Topics to Revise

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1. Meaning, Need, and Legal Basis

  • Cash Flow Statement shows cash inflows and cash outflows for a specific period.
  • It is different from Position Statement and Income Statement.
  • It is one of the financial statements of a company.
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2. Cash, Cash Equivalents, and Cash Flows

  • Cash comprises cash in hand and demand deposits with banks.
  • Cash equivalents are short-term highly liquid investments readily convertible into known amounts of cash with insignificant risk of value change.
  • An investment normally qualifies as cash equivalent only if its maturity is three months or less from the date of acquisition.
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3. Classification of Cash Flows

  • Cash flows are classified into operating, investing, and financing activities.
  • Operating activities are the principal revenue generating activities of the enterprise and are not investing or financing activities.
  • Investing activities are acquisition and disposal of long-term assets and other investments not included in cash equivalents.
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4. Special Items and Their Treatment

  • In a financial enterprise, interest paid, interest received, and dividend received are operating activities, while dividend paid is financing.
  • In a non-financial enterprise, payment of interest and dividends are financing activities, while receipt of interest and dividends are investing activities.
  • Tax on operating profit is operating.

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Full Notes

Key Concepts

A statement showing inflows and outflowsCash comprises cash in handThese are the principal revenueThese include acquisition and disposalThese activities change the size

Frequently Asked Questions

What are the important topics in Cash Flow Statement for Jammu & Kashmir Board Class 12 Accountancy?
Cash Flow Statement covers several key topics that are frequently asked in Jammu & Kashmir Board Class 12 board exams. Focus on the core concepts listed on this page and practise related questions to build confidence.
How to score full marks in Cash Flow Statement — Jammu & Kashmir Board Class 12 Accountancy?
Understand the core concepts first, then work through the 116 practice questions available for this chapter. Revise formulas and definitions regularly, and use flashcards for quick recall before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

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